Oil prices edged lower on Wednesday after a report highlighted an unexpected increase in U.S. crude stockpiles, adding to ongoing concerns about global supply dynamics. Brent crude slipped to below $76 per barrel, breaking a three-day streak of gains, while West Texas Intermediate (WTI) hovered around $72.
The American Petroleum Institute (API), an industry group, reported a 3.3 million-barrel rise in U.S. commercial crude inventories for the week ending February 16. If confirmed by official data later this week, it would mark the fourth consecutive week of stockpile increases, signaling a potential slowdown in demand.
Despite these bearish signals, oil prices had risen earlier this week, driven by concerns over tightening global supply. OPEC+ is reportedly delaying its planned production increase, exports from Kazakhstan were disrupted following a Ukrainian drone strike, and the G7 nations are considering a stricter price cap on Russian oil.
However, market volatility has eased after a rocky start to the year. A key gauge of implied volatility has decreased, indicating that traders are becoming less reactive to the series of geopolitical and policy shifts under U.S. President Donald Trump’s administration.
Meanwhile, in Iraq, there are reports that oil exports from the semi-autonomous Kurdish region could resume this week. However, Turkey has stated it has yet to receive official notification about the resumption of oil flows through the Ceyhan energy hub, where Kurdish oil is shipped via pipelines running through Turkey.
On the geopolitical front, tensions surrounding the ongoing war in Ukraine have added to market uncertainty. President Trump recently referred to Ukrainian President Volodymyr Zelensky as a “dictator,” raising concerns about the future of peace talks and the potential impact on sanctions against Russian oil. A peace agreement without Ukraine’s involvement could alter the status of Russian oil exports, which are currently subject to sanctions.
“There’s still a lot of uncertainty in the oil market, with no clear direction due to the unknowns surrounding global supply and U.S. policy shifts,” said Sean Lim, an analyst at RHB Investment Bank Bhd in Kuala Lumpur. The bank is forecasting an average price of $75 per barrel for Brent crude in 2025.
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